Background: Non-alcoholic fatty liver disease (NAFLD) is strongly related to obesity, insulin resistance and type 2 diabetes. Irisin is an exercise-induced myokine which improves glucose profile and insulin resistance. Objective: To evaluate the potential effects of irisin on liver function in type 2 diabetic rats with NAFLD and elucidate the underlying mechanisms. Materials and methods: Thirty adult male albino rats were divided into 3equal groups: control rats, type 2 diabetic with NAFLD rats, and type II diabetic rats with NAFLD received irisin (0.5 μg/gm body weight once daily for 8 weeks). Diabetes was induced by high fat diet for 12 weeks followed by injection of small dose of streptozotocin (35 mg/kg body weight). Eight weeks after establishment of diabetes, body mass index and abdominal circumference were estimated. Serum was analysed for glucolipid metabolic parameters, liver enzymes, C-reactive protein, tumour necrosis facror-α. Liver homogenate was assayed for malondialdehyde Superoxide dismutase, and glutathione s-transferase activities. Liver sections were stained with Hematoxlyin & eosin. Results: Irisin treatment significantly improved glucolipid metabolic parameters, liver enzymes, antioxidante enzymes accompanied by significant decrease in inflammatory mediators and malondialdehyde levels, with improvement of the histopathological findings. Conclusion: Irisin may be used as a promising agent against NAFLD in type 2 diabetic rats possibly through controlling glucose and lipid metabolism and via its beneficial anti-inflammatory and anti-oxidant effects as well. Key words: Irisin, Type 2 Diabetes, Fatty Liver, High- Fat Diet, Rats.